Edward Moya, a market analyst at OANDA, believes that the correlation between Bitcoin and the traditional financial market is nearing its end. “Bitcoin may end its correlation with the stock markets. After a strong jobs report in the United States, Wall Street sent stocks sharply lower, but Bitcoin did not,” Moya said of the possible end to the correlation.
Is crypto winter over?
In general, Bitcoin reacted the same as stocks to macroeconomic news. In fact, you often saw Bitcoin even more overreacting to new information. If the stock markets lost 2 percent, Bitcoin sometimes tripled or even quadrupled. “If we were still in a crypto winter, Bitcoin’s typical response would have been an even sharper decline than US equities,” Moya continues.
According to Craig Erlam, a colleague of Moya at OANDA, Bitcoin will continue to trade around $23,000 for the foreseeable future and a breakout above $25,000 will be the next big test for the digital currency. If Bitcoin succeeds, then we can really look up again and it seems safe to say that the bear market is over. Until then, it is in any case advisable to keep the winter clothes on for a possible new dip in temperature.
“Moon and Lambo”
On-chain analytics company Santiment notes that the words “moon” and “lambo” are used in a sarcastic manner during crashes. But that this often marks the moments when Bitcoin flips and reverses the trend from negative to positive. According to Santiment, the moment that Bitcoin will rise again is in any case getting closer.
Funnily enough, see the chart above, it is indeed true that the use of “moon” and “lambo” is actually high during the bottoms. It’s probably a way for people to deal with their emotions. In this sense, this indicator is also a form of technical analysis, a way of estimating the emotions of the market and then trading on them.